Cash­ing in

As­cen­sion ready to col­lect with Ac­cre­tive’s IPO

Modern Healthcare - - The Week In Healthcare - Melanie Evans

As­cen­sion Health, the nation’s largest Catholic health sys­tem, will scale back a stake in Ac­cre­tive Health with the rev­enue-cy­cle technology com­pany’s planned ini­tial pub­lic of­fer­ing. Ac­cre­tive Health, Chicago, said in reg­u­la­tory fil­ings last week the com­pany plans to sell roughly 6.67 mil­lion shares and its share­hold­ers, in­clud­ing St. Louis-based As­cen­sion, plan to sell an equal amount, at an ex­pected price of $14 to $16 per share.

The sale of As­cen­sion’s shares, at least 689,000, would raise $9.6 mil­lion to $11 mil­lion, though the sys­tem’s ex­act profit on the sale can­not be de­ter­mined with­out the price paid for the shares be­ing sold, which is not dis­closed. Strong de­mand dur­ing the IPO could in­crease As­cen­sion’s sale by 103,350 shares, which would boost to­tal rev­enue from the sales to $11.1 mil­lion to $12.7 mil­lion.

Nonethe­less, As­cen­sion could see much of that rev­enue as profit and the sys­tem may re­turn to the mar­ket within a year to sell more of its stake, ac­cord­ing to the fil­ing.

As­cen­sion spokesman Steve LeResche said the sys­tem de­clined to com­ment dur­ing a quiet pe­riod.

As­cen­sion re­ceived roughly 3.5 mil­lion shares from Ac­cre­tive in late 2004 and pur­chased ap­prox­i­mately 1.3 mil­lion more for 1 cent per share be­tween 2007 and March of this year, un­der terms of a war­rant agree­ment.

As­cen­sion, which owns 75 hos­pi­tals, was Ac­cre­tive’s first cus­tomer and the not-for­profit health sys­tem re­ceived stock and war­rants for its startup, lab­o­ra­tory and con­sult­ing ser­vices, the fil­ing said.

As­cen­sion pur­chased an­other 2.6 mil­lion shares in 2007 for about $5.5 mil­lion, or $2.09 per share. The sys­tem will also ex­er­cise its right to buy an­other 812,500 shares for $15 prior to the pub­lic of­fer­ing.

Any gain from the sale would be a rel­a­tively mi­nor ad­di­tion to As­cen­sion’s siz­able in­vest­ment in­come. As­cen­sion’s in­come from in­vest­ments for the six months that ended in De­cem­ber was $728 mil­lion, fi­nan­cial records show.

The rev­enue-cy­cle com­pany is among the in­vest­ments un­der man­age­ment by the Ro­man Catholic health sys­tem’s ven­ture cap­i­tal arm.

As­cen­sion holds a 10% stake and re­mains Ac­cre­tive’s largest cus­tomer; As­cen­sion ac­counted for $307.5 mil­lion, or 60.3%, of the com­pany’s 2009 net ser­vice rev­enue, the fil­ing said.

But that stake is ex­pected to de­cline with the pub­lic of­fer­ing, and As­cen­sion could sell ad­di­tional stock one year af­ter the com­pany goes pub­lic. Ac­cre­tive said in its fil­ing it will re­turn to reg­u­la­tors in one year with a no­tice of re­sale for stock that As­cen­sion acquired by ex­er­cis­ing its war­rants and its 2007 pur­chase, or roughly 4.7 mil­lion shares.

Among Ac­cre­tive’s top ex­ec­u­tives, Mary Tolan, pres­i­dent and CEO, will sell shares worth roughly $17.6 mil­lion to $20.1 mil­lion. Eti­enne Def­farges, ex­ec­u­tive vice pres­i­dent, will sell shares worth $6.5 mil­lion to $7.4 mil­lion. Chief Fi­nan­cial Of­fi­cer John Staton is ex­pected to sell shares worth $1.8 mil­lion to $2.1 mil­lion. And Se­nior Vice Pres­i­dent Gre­gory Kazar­ian will sell shares worth about $1.7 mil­lion to $1.9 mil­lion.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.